Mice homozygous for a null mutation in the winged helix transcription factor HNF3alpha showed severe postnatal growth retardation followed by death between P2 and P12. Homozygous mutant mice were hypoglycemic despite unchanged expression of HNF3 target genes involved in hepatic gluconeogenesis. Whereas insulin and corticosteroid levels were altered as expected, plasma glucagon was reduced markedly in the mutant animals despite the hypoglycemia that should be expected to increase glucagon levels. This correlated with a 70% reduction in pancreatic proglucagon gene expression. We also showed that HNF3alpha could bind to and transactivate the proglucagon gene promoter. These observations invoke a central role for HNF3alpha in the regulatory control of islet genes essential for glucose homeostasis in vivo.